SEAS Alumnus Alvin E. Roth Wins 2012 Nobel Prize in Economics
Alvin E. Roth, who graduated from Columbia Engineering in 1971 and is currently the George Gund Professor of Economics and Business Administration at Harvard, was awarded the 2012 Nobel Prize in Economics for his pioneering work in the practical design of market institutions. He shares the award—officially named the Sveriges Riksbank Prize in Economic Sciences—with economist Lloyd S. Shapley, professor emeritus at University of California-Los Angeles, who also used game theory to better understand different matching methods.
The Royal Swedish Academy, which announced the winners this morning, awarded the two researchers the prize for “an outstanding example of economic engineering,” and while they worked independently of one another, the “combination of Shapley’s basic theory and Roth’s empirical investigations, experiments, and practical design has generated a flourishing field of research and improved the performance of many markets.” They will share the $1.2 million prize.
“We are absolutely thrilled,” said Donald Goldfarb, Interim Dean of The Fu Foundation School of Engineering and Applied Science and Alexander and Hermine Avanessians Professor of Industrial Engineering and Operations Research (IEOR). “Columbia Engineering now has two graduates who have won the Nobel Prize in Economics, Robert C. Merton BS’66 in 1997 and Alvin E. Roth in 2012, both from programs now housed in the IEOR Department! This is another highly visible confirmation of the great strengths at our school—superb students and professors.”
Speaking at a press conference today at Stanford, Roth said of winning the Nobel, “It is a great honor.” He added, “Economics and the sciences are generally not done by individuals. They are done by large teams of people.”
Roth and his colleagues demonstrated that stability is the key to understanding the success of particular market institutions. Roth began studying the labor market for American doctors in the early 1980s, and was asked to direct its redesign in 1995. The Roth-Peranson (1999) algorithm that resulted is now used to organize a number of medical and health care markets. Roth’s research has led to the redesign of such complex systems as assigning students to public schools in large urban cities and the matching of kidney and other human organs to patients in need of a transplant.
Roth studied operations research as a student at the Engineering School, “which is about making things work better,” he said via email earlier today. “That’s what my market design colleagues and I are still trying to do.”
After receiving his B.S. from the Engineering School in 1971, Roth moved to California to complete his master’s and doctorate at Stanford University, both in operations research, in 1973 and 1974, respectively. He began his academic career as a professor in the departments of business administration and economics at the University of Illinois. From 1982 to 1998, he was the A.W. Mellon Professor of Economics and also a professor of business administration at the University of Pittsburgh. He joined Harvard in 1998 and is also a visiting professor of Economics at Stanford where he will join the faculty full-time in 2013. Roth has received numerous professional honors and awards in recognition of his research including a Guggenheim Fellow, an Alfred P. Sloan Research Fellow, and was elected a fellow in the American Academy of Arts and Sciences.
Last week, Robert J. Lefkowitz, another Columbia alumnus who graduated in 1962 from the College and in 1966 from the Columbia’s College of Physicians and Surgeons, was awarded the 2012 Nobel Prize in Chemistry. To date, 82 Columbians—including alumni, faculty, adjunct faculty, researchers, and administrators—have won a Nobel Prize at some point in their careers.